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Midterm election and impact on the market ???
Old 11-06-2018, 06:22 AM   #1
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Midterm election and impact on the market ???

Mods, please don't kill this thread as it is not political but just asking for honest opinions concerning the midterms.

What are market implications if;

Split house (dem)and senate (GOP) ?

Dems win both house and senate ?

GOP keeps both house and senate ?
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Old 11-06-2018, 06:25 AM   #2
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Quote:
Originally Posted by frayne View Post
What are market implications if;

Split house (dem)and senate (GOP) ?

Dems win both house and senate ?

GOP keeps both house and senate ?
No matter which scenario plays out, the market will fluctuate.

I'll bet my entire portfolio on the accuracy of my prediction.
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Old 11-06-2018, 07:06 AM   #3
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I have no idea, but don't ask Paul Krugman.
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Old 11-06-2018, 07:12 AM   #4
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Short-term, after elections, the market will dramatically go one way or the other, similar to other world events. Then the chickens come home, and earnings will get better or worse. I personally think earnings will continue to worsen. Look at S&P 500 1-month and 3-month at finviz. That is my simplified view of the market.
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Old 11-06-2018, 07:12 AM   #5
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Quote:
Originally Posted by frayne View Post
Mods, please don't kill this thread as it is not political but just asking for honest opinions concerning the midterms.

What are market implications if;

Split house (dem)and senate (GOP) ?

Dems win both house and senate ?

GOP keeps both house and senate ?
This would make a good poll actually. Not partisan I think. The three outcomes mentioned by the op, which of us thinks which will prevail?
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Old 11-06-2018, 07:24 AM   #6
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I do not see the elections having much impact except in the short term. My main concern would be if the results were not finalized in short order.
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Old 11-06-2018, 08:28 AM   #7
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I think the market already has an expected result baked in to the current numbers. Only if a drastic change occurs from the market's expected, would it have much effect. Then it would be a short-term effect, and things would return to normal fluctuations.


One thing for sure the market does not like instability. There are many events besides the current election that cause market swings.
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Old 11-06-2018, 08:37 AM   #8
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I too think the market bets have already been placed. If true the markets currently expect a Democratic house and a Republican senate. If it's very different the markets will adjust but no big moves IMO.

The 3rd year of a presidential term has been very good. Here is a recent article on that: https://www.marketwatch.com/story/th...-ii-2018-11-05

I have been aware of this 3rd year bias for decades so it is nothing new.
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Old 11-06-2018, 08:42 AM   #9
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Uhh , I think the market is normally 6 months ahead of all of us so what we see today will probably be . It is what it is .
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Old 11-06-2018, 09:06 AM   #10
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Historically stocks do well in the couple three months following midterms. It might reflect a reduction in uncertainty, or perhaps it's just part of the common end-of-year rally.
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Old 11-06-2018, 09:54 AM   #11
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I don’t know or care what the Wall St et al consensus expectation for the midterms is, but it’s already baked in to indexes. If the midterm outcome is what’s baked in, any volatility will be short lived. If the outcome isn’t what’s baked in, there may be more volatility. But as always, things will settle down again, probably pretty quickly - so it doesn’t matter anyway.
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Old 11-06-2018, 10:32 AM   #12
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We won't know until it is over.

The markets want stability.

I've been reading for weeks (heavily left leaning media) that the House is going Democrat. The Senate will stay Republican. I don't know if either of these will happen.

Wanting something to happen, reporting it constantly and that actually happening are two different things.

I still think market fundamentals are good enough where the remainder of 2018 should be neutral to positive. A complete guess.

It should be fun to watch. Approach the whole mess with a stoic eye, very little emotion and acceptance that your vote is under your control, the outcomes are not.

I do find it interesting that there will be a massive media and global celebration if one side wins and a dour, dissapointed durge if another side wins. The general media and population does not approach politics with a stoic eye.
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Old 11-06-2018, 10:38 AM   #13
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Since World War II, stocks have been higher 12 months after every single mid-term election.

https://www.marketwatch.com/story/th...-ii-2018-11-05

Maybe this one will be different. Maybe not.
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Old 11-06-2018, 10:42 AM   #14
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I tend to think the market is pseudo-cyclical regardless of politics so it would go down (or up) in any event. A change in Washington may cause the market to go down (or up) a bit sooner, but I think whatever it does, it would have done it anyway.

As a side note, the way I will vote is not influenced by what I think the market will do. My choices are what I think is best for the country, state, and community.
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Old 11-06-2018, 10:57 AM   #15
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Since World War II, stocks have been higher 12 months after every single mid-term election.

https://www.marketwatch.com/story/th...-ii-2018-11-05

Maybe this one will be different. Maybe not.
Caught Ken Fisher on CNBC this morning citing that stat or something similar.

He is bullish regardless of the election results.

Says markets outside the US have declined in the past year, which is a good sign.
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Old 11-06-2018, 11:05 AM   #16
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Says markets outside the US have declined in the past year, which is a good sign.
Interesting.

Why would that be a good thing?
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Old 11-06-2018, 11:15 AM   #17
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Only saw part of this exchange on TV...



Someone in Chicago options was saying that if the Dems take both houses they are pricing in a drop on the market...


He was saying that the market wants supply side economics which is what has been the past two years...


I think part of the current correction is pricing in the Dems taking the house and Rep keeping the senate...
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Old 11-06-2018, 12:04 PM   #18
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Interesting.

Why would that be a good thing?
I guess the markets aren't too bubbly if people are pessimistic because of recent market performance.
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Old 11-06-2018, 12:15 PM   #19
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I guess the markets aren't too bubbly if people are pessimistic because of recent market performance.
I don't understand what that has to do with "markets outside the US have declined in the past year".
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Old 11-06-2018, 12:17 PM   #20
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According to this opinion article on MarketWatch historically they have been good.

Quote:
Since 1946, there have been 18 midterm elections. Stocks were higher 12 months after every single one. Every single one. That’s 18 for 18. Even though we’ve had every possible political combination in the past 72 years. Republican president with Democratic Congress. Democratic president with Republican Congress. Republican president and Congress. Democratic president and Congress.

Since 1946, stocks have risen an average of 17% in the year after a midterm. And if you measure from the yearly midterm lows, the results are even better. From their lows, stocks jumped an average of 32% over the next 12 months. For perspective, that’s more than double the average performance for stocks in all years. We’re also entering the third year of a presidential term, which is historically the strongest year for stocks.
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